Bitcoin’s price plummeted below $50,000, causing mass liquidations and panic in the crypto market. Currently, Bitcoin stands at $48,317 with a market cap of about $900 billion. Meanwhile, some traders believe the market to be bullish despite the price fall.
Why did Liquidations Happen?
For the past few months, the crypto market and Bitcoin was immensely crowded. Corporations were investing heavily, and the futures market was highly over-leveraged. This was a sensitive situation in which a minor transaction or monetary movement would cause a mass liquidation, which the crypto market had experienced.
Analytics firm Santiment found out that a bull transaction happened, which drag the price value downward. The transaction includes transferring 2700 BTC. This movement of Bitcoin in large amount occurred just before the drop. According to the analysts, Bitcoin’s correction was initiated by a huge inflow spike. It was also revealed that the same BTC address was responsible for the movement of 2,000 Bitcoin last March. This particular address, in total, was responsible for 91,935 BTC movement, which accounted for 73 transactions in one year. The data further conveyed that $91,935 worth of Bitcoin moved away in minutes after each import.
Is the Crypto Market Still Bullish?
Even when Bitcoin was dropping, the funding rate of the futures was around 0.15%. This trend explained that over-leveraged investors and buyers were trying to benefit from each dip, hence, saturating the crypto market. But this also caused the market to remain heated even after the correction.
Byzantine General, a trader, believed this trend to be healthy and called it a “coordinated shakeout”. The General said that this drop is not concerning as the top coin did not drop abnormally. The trader further pointed out the big chunk of buyers interested and in line to buy Bitcoin and utilize the opportunity the dip created. The pseudonymous trader believed that these signs suggest the market to be bullish.
It is crucial for premium cryptocurrency to not fall below the $45k mark. In that case, the chances of a correction are relatively higher.
Currently, Bitcoin is trading at $47,598 after decreasing by more than 11% in the past 24-hours.